Which term refers to an interest in property that allows it to be sold to satisfy a debt?

The term that refers to an interest in property that allows it to be sold to satisfy a debt is known as a security interest. A security interest is essentially a legal claim on collateral that has been pledged, which gives the creditor the right to take possession of the property if the debtor fails to meet their obligations, such as repaying a loan. This arrangement is crucial in secured lending, as it provides the lender with some assurance that they can recover their funds in the event of default.

The concept of a security interest is foundational in many aspects of finance and accounting, particularly in the management of risk associated with lending. It allows lenders to mitigate risk by having a tangible asset that can be liquidated to repay the owed amounts.

In contrast, the other terms refer to different concepts. A bailee is someone who temporarily receives possession of personal property but does not have ownership rights, while a trustee manages property or assets on behalf of another party under a trust agreement. On the other hand, market valuation is the process of determining the economic value of an asset or liability based on current market conditions, which does not inherently involve the rights to sell property for debt satisfaction.